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Perth, 23 March 2000: transcript of doorstop interview [universal service obligation; Telstra inquiry]

Doorstop Interview

 

Stephen Smith - Shadow Minister for Communications

 

Subjects: Universal Service Obligation, Telstra Inquiry

 

Transcript - Perth - 23 March 2000

 

E & OE - Proof Only

 

SMITH: Today we've seen the Government make what it described as a major announcement on the delivery of the universal service obligation. The key point that the Government has made today is the point I'm not sure it actually wanted to make. It makes it clear that, irrespective of competitive tendering, Telstra remains the carrier of last resort. Telstra remains the safety net for the provision of the delivery of services to rural and regional Australia.

 

The Government, and in particular, the National Party, have been trumpeting the competitive tendering of the Universal Service Obligation as the saviour of all the problems and to use it as a justification for the full privatisation of Telstra.

 

What do we see today? We see two pilot projects which will commence in June of this year, details to be advised, but where Telstra is required to continue to operate in those regional areas as a safety net, as the carrier of last resort.

 

The second point I make today is that it's quite clear from comments that Deputy Prime Minister and National Party Leader, John Anderson, has made that, other than Bob Katter, the National Party has folded its cards on the full privatisation of Telstra. It's quite clear that, other than Mr Katter, the National Party has folded its cards.

 

And we've also seen from Mr Anderson today a complete shambles from the Government so far as to whether the proposed Telstra inquiry will conduct public hearings. They're going to have field trips, they're going to have presentations but we couldn't possibly have public meetings at town halls in country towns because they might become rowdy and people might tell 'war stories'. So, we have a complete 'botch and shambles' operation so far as the public inquiry is concerned.

 

On Mr Besley, I repeat my comments that there is a perception that, irrespective of the personal qualities of Mr Besley, he has now been placed in a position by the Government where he is completely compromised and, as a consequence, the inquiry and his chairing of it are fatally flawed.

 

There are a couple of minor matters which I'll conclude with.

 

I note that the Government has announced that it proposes to increase the compensation for the cost of the Universal Service Obligation from $250 million to $280 million. I've made the point previously that this is an area which goes to industry certainty, and, as a consequence, bipartisan support is important. I have an inclination to support what the Government is doing but I'll discuss it with industry and see industry's response before making a recommendation to my colleagues.

 

JOURNALIST: Isn't it a good thing, though that it's been opened up, universal service obligation has been opened up? Won't that keep Telstra on its mettle?

 

SMITH: Well, I have made the point in the past that I have no objection to the notion of competitive tendering for the universal service obligation on a regional, a niche, or a localised basis. And that is what the Government is pursuing. But what the Government has done politically, and what the National Party has done politically in the last couple of weeks, is to trumpet up the competitive tendering of the USO on a regional basis as a trick with mirrors to solve all the problems of service delivery to rural and regional Australia.

 

When we see the details today, and this is detail which the Government has been working on for some considerable period, when we see the detail today, what are we left with? We are left with two pilot programs in regional areas, details to be advised by June 2000, but with the requirement that Telstra continue to operate in those vital areas, the requirement that Telstra continue to be the safety net for the delivery of universal obligations in rural and regional Australia, the requirement that Telstra be the carrier of last resort. And this gives the lie to the assertion that competitive tendering of the universal service obligation gives you the excuse to fully privatise Telstra. That straw that the National Party is clutching at is a straw for a drowning man. The National Party have folded their cards on the full privatisation of Telstra but competitive tendering of the USO won't save them.

 

JOURNALIST: Are you concerned that Telstra will be left holding the baby in all those areas, that there is not any money to be made in phone services?

 

SMITH: This goes to the heart of the privatisation and the universal service obligation issue. We have made the point, consistently, that we opposed the partial privatisation of Telstra because we believed that service levels to rural and regional Australia would fall. We've also made the point that Telstra continues to be either a monopolist or the dominant market player in the telecommunications area. And on that basis, Telstra will continue to be the national universal service provider. And it must continue to be the national universal provider of last resort while the Government is in the throws of exploring the notion of competitive tendering of the USO on a regional basis.

 

JOURNALIST: The Government says it's putting $150 million into providing untimed local calls for remote communities. Isn't that carrying out their commitment to support regional Australia?

 

SMITH: Well, this is part of the proceeds of partial privatisation. This is part of the bribes to the bush money for the 49.9 per cent privatisation of Telstra. The Government have announced a $150 million program for extending the untimed local calls regimes to regional and remote Australia. They've also indicated they're proposing to put that out to tender rather than giving it to Telstra or any other carrier. And I have no objection to that course of conduct. The essential point here is, there is no difficulty with extending the local call zones, the local untimed call zones to remote and regional Australia, but the monies which the Government is using to fund this program comes from the partial privatisation of Telstra. And let's keep those funds in context. In the last year, Telstra has made a profit of $4 billion - more than double the proceeds of partial privatisation which have gone to rural and regional Australia to improve services to rural and regional Australia, including telecommunication services. So, let's keep the paltry $150 million in its context. The Government got for the Commonwealth $14 billion for the first one-third privatisation of Telstra. In the last year, Telstra has made a $4 billion profit.

 

JOURNALIST: Isn't it fair that the inquiry that they're holding not have these public meetings, given that they are likely to turn into slanging matches and slanging matches get nobody anywhere?

 

SMITH: Well, that assumes that people who live in country towns and people who live in rural and regional and remote Australia can't conduct themselves civilly. And that's not a view that I agree with. But, more importantly, the Government gave an iron clad commitment at the last election that it would establish by legislation an independent impartial tribunal. And earlier this week we saw the Prime Minister in his paid television address to regional Australia again committing himself to a public inquiry. And, despite the Prime Minister saying to rural and regional Australia in a paid TV broadcast that it would be public, it has the Chairman of the inquiry, Mr Besley, the Deputy Prime Minister, Mr Anderson, saying effectively, 'this won't be a public inquiry'. And the National Party have folded their cards on this aspect of the inquiry other than Mr Katter, who's made, it seems to me, the unremarkable point that if you actually want to find out what is happening in rural and regional and remote Australia, so far as the delivery of services is concerned, you might actually want to take the opportunity of talking to those people and actually listening to them.

 

Ends

 

Authorised by Gary Gray, 19 National Circuit, Barton ACT 2600.